3M and the Appeal of RFID File Tracking

3M, maker of such household brands as Scotch tape and Post-it notes, last month announced that it had been awarded a five-year contract from the U.S. General Services Administration (GSA) for 3M RFID File Tracking Systems.

August 1, 2005—3M, maker of such household brands as Scotch tape and Post-it notes, last month announced that it had been awarded a five-year contract from the U.S. General Services Administration (GSA) for 3M RFID File Tracking Systems. The contract means that 3M will enjoy streamlined access to selling its RFID file tracking services to federal agencies. Dave Sayers of 3M's Security Systems Division said, "This GSA contract is another milestone in the growing emergence of RFID for applications such as file tracking, and the recognition of 3M as a pioneer and leader in this technology."

Sayers appears to be right. While most other companies have gone after the supply chain segment of RFID, 3M has positioned itself to be the leading solution provider of RFID-based file tracking systems, targeting the government, law offices, accounting firms, and other fields whose physical record-keeping needs are paramount. Lost, misplaced, or stolen files in fields such as those can result in significant financial and productivity losses. File-tracking systems therefore offer quantifiable benefits and in many cases attractive near-term ROI. (The 3M site has some relevant case studies.)

Given the demonstrable ROI and the potential market opportunity (consider the quantity of lawyer, doctor, government and accounting offices), the question is why more RFID companies haven't targeted this space. There appear to be three answers. First, the technology is not easy, according Bob Scher, CEO of Dynasys, an RFID services firm that offers a file tracking product. Given the particulars of tagging stacked paper, "it is relatively difficult to get a product that works right." Building a system wherein an RFID reader can automatically detect the removal and replacement of tagged files from a filing cabinet is quite complicated and in most cases requires that each cabinet be equipped with its own reader. Alternatively, tagged files could be manually placed in front of a wall-mounted reader by the user as they are "checked out" and "checked in" of the room, but such a system could just as easily be designed with bar codes. "We busted our brains for quite a while to learn how to do this," says Scher of an RFID-reader equipped file cabinet the company recently put on offer.

The second reason why this market has not attracted as much attention is that the potential for tag consumption is much less than in the supply chain. Once a file-tracking system is in place, the subsequent need for additional tags is very low. Compare that with the millions of units flowing through the world's supply chains, and the number is simply nominal.

Finally, while RFID file tagging might provide good ROI, convincing doctors' offices and accounting firms that they need the technology is no small feat. Contrast that with supply chain managers, whose job and core competency it is to squeeze efficiency from the supply chain. SCMs intuitively understand and appreciate the value of tracking and tracing, whereas your average MD, JD, or CPA would probably be a much harder sell.